FireWire is Apple Computer's version of a standard, IEEE 1394, High Performance Serial Bus, for connecting devices to your personal computer. FireWire provides a single plug-and-socket connection on which up to 63 devices can be attached with data transfer speeds up to 400 Mbps. The standard describes a serial bus or pathway between one or more peripheral devices and your computer's microprocessor. Many peripheral devices now come equipped to meet IEEE 1394. FireWire and other IEEE 1394 implementations provide:
  • A simple common plug-in serial connector on the back of your computer and on many different types of peripheral devices
  • A thin serial cable rather than the thicker parallel cable you now use to your printer, for example
  • A very high-speed rate of data transfer that will accommodate multimedia applications (100 and 200 megabits per second today; with much higher rates later)
  • Hot-plug and plug and play capability without disrupting your computer
  • The ability to chain devices together in a number of different ways without terminators or complicated set-up requirements

Briefly How It Works


There are two levels of interface in IEEE 1394, one for the backplane bus within the computer and another for the point-to-point interface between device and computer on the serial cable. A simple bridge connects the two environments. The backplane bus supports 12.5, 25, or 50 megabits per second data transfer. The cable interface supports 100, 200, or 400 megabits per second. Each of these interfaces can handle any of the possible data rates and change from one to another as needed.
FireWire vs USB

Feature
USB
FireWire

1.1
2.0
400
800
Data transfer rate
12 Mbps
480 Mbps
400 Mbps
800 Mbps
Number of devices
127
127
63
63
Plug and play
Yes
Yes
Yes
Yes
Hot-pluggable
Yes
Yes
Yes
Yes
Isochronous devices
Yes
Yes
Yes
Yes
Bus power
Yes
Yes
Yes
Yes
Bus termination required
No
No
No
No
Bus type
Serial
Serial
Serial
Serial
Cable type
Twisted pair (4 wires: 2 power, 1 twisted-pair set)
Twisted pair (4 wires: 2 power, 1 twisted-pair set)
Twisted pair (6 wires: 2 power, 2 twisted-pair sets)
Twisted pair (8 wires: 2 power, 2 twisted-pair sets, 2 ground)
Networkable
Yes - host-based
Yes - host-based
Yes - peer-to-peer
Yes - peer-to-peer
Network topology
Hub
Hub
Daisy chain
Daisy chain
Source:
http://computer.howstuffworks.com/firewire3.htm